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Lebanon's Economy Battered by Aerial Attacks

As a third week of violence begins along the Lebanon-Israel border, there are fewer Israeli airstrikes in central and northern Lebanon, as the Israeli military focuses on Hezbollah strongholds south of the Litani River, about 20 miles from the border.

But the aerial attacks that began on July 12 have left much of Lebanon's infrastructure in tatters.

In Beirut, construction cranes, representing a huge building boom that had been under way since Israel's withdrawal in 2000, are largely idle. Jiad Azour, Lebanon's finance minister, says Israel's constant bombing has affected every aspect of the country's economy.

"The economic activity is not functioning," Azour said. "The tourism industry was hit, transportation companies, airline, all these sectors are not functioning."

Azour says it will cost at least $4 billion to rebuild the country's destroyed infrastructure. Lebanon was already struggling to overcome a $40 billion public debt, primarily the result of its long internal struggle. And before violence broke out between Israel and Hezbollah fighters, peace had returned. Many Lebanese living abroad had begun to return home and invest in their country.

When the summer started, much of Lebanon felt as though it had a new lease on life -- and a new handle on a burgeoning tourist trade. New shops, restaurants, and hotels opened up. Construction was common.

Now developers are asking their investors to be patient -- and hoping for a quick resolution to the current crisis.